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106. gold is holding up desly given the competition from stocks today, up three bucks on the trading session. the oilmatic part of the reason we're seeing the the move in equity, the oil market has been moving to the downside recently. the ten-year note, the yield 1.89%. ty, quite a day. >> we've got -- it is quite a day and quite an evening. a market special tonight at 7:00 p.m. eastern time. dow at an all-time high. we hope you will join us for

that. we thank you for joining us for "power lunch." >> indeed we do. have a great afternoon. "street signs" begins right now. welcome to the all-time high club america, your stock market on the rise and breaking records. we're going to lay out the five reasons we are going higher and the five reasons we could go lower. we want your vote, higher or lower on the dow one year from now. go to "street signs".cnbc.com and vote. what stocks are our viewers the most interested in? we're going to show you. another exclusive, is jcpenney screaming buy? yes, mandy, a buy. we will try to make the case. >> indeed we will. the dow passed both its closing and intraday peak for 2007. the dow transports have been the gold star performers leading this rally since march 2009 low with a gain of 185% the nasdaq

composite at a fresh 12-year high. while it's only 1.5% away from its 2007 record, it's not there yet. the dow is tracking records. are we entering a sustained bull market from here? >> i think there's plenty of evidence that we are but there's plenty of head winds. let me just first note we are holding up near highs, three of one advancing stocks, risk, tech, industrials, materials are the ones moving up. you can see all those advancing mostly better than 1%. let me answer the question about the bull market. i'll give you four or five reasons why the bulls are arguing we're near a bull market sustainable. i'm talking bull, fed, the economy improving overall. earnings at an all time high. that's a major factor why we're

here. record cash on the sidelines. individuals in corporate amounts. thanks to the fed, not a lot of other places to put the money. major head winds. this is what i get from the bears when i ask them what's going to derail this potentially. let's take a look at the head winds to new highs. subpar, gdp growth a problem, anemic top line growth we've been seeing is certainly an issue. fed continuing stimulus, i would add lack of fiscal reform in washington and in europe. mandy, i think the fed would definitely take their foot off the brake if they saw fiscal reform. that's one of the reasons it's unlikely the fed will do anything in an immediate way. >> excellent point, bob. equities putting on party hats. rick santelli, what are bond traders doing? >> as i talk, you'll see ten-year note yields, boone yields, japanese government bond, jgb, uk, there's very

similar patterns. the treasury market, like a lot of markets on the fixed income side, they are moving basically sideways, slightly higher, but in an atmosphere of very low historic rate, which is at the footing, at the foundation, at the epicenter of why many are nervous about the dow. think about your own life, mandy. if interest rates are extremely low and looking whether buy a car, house, business, angel investors, private equity, may be more aggressive, not necessarily as disciplined if interest rates were 5%, or like the '80s in the teens. that's where the cornerstone of a bubble argument comes from. not just equities but interming ling of cheap capital, low interest rates and then looking how it shows up inequities. >> absolutely. certainly compared to australia, it's basically free money. seema mody, as i mentioned nasdaq composite, 12-year highs. what in particular is leading it

higher today. >> definitely a strong day for tech. that's what's helping nasdaq trade above 3200, a key psychological level. pointed out a 12-year high as well. keep in mind we're still 36 away from the nasdaq highest close and 37% away from its intraday high that was hit before the dot-com crash. for all the negativity surrounding app these days, it's actually the best performing tech stock on the nasdaq 100 since the tech bubble burst gaining more than 4,000%. other tech winners include amazon, online travel player price line and person digital. in terms of today's big movers, take a look at the list, semiconductor names, tech stops like apple and cisco feeling that nasdaq to its 12-year high. >> thank you, seema. mandy and bob. >> it's cool, the 12-year high.

you don't care about where we've been but where we are now. you and i, let's duke it out. >> let's duke it out. >> five reasons we'll keep rising and five reasons we are destined to drop. i shall let you make the bull case first. >> ladies first. remember that. first of all you hear many people on "street signs" say stocks are still cheap as compared to many of the other asset classes. also corporate profit margins are near record highs. number three, oil and natural gas energy boom. this is going to be the key moving forward to america's energy sustainability. plus the great rotation aka, also known as momentum. we're talking about rotation out of bonds, out of commodities and into stocks. also you've got the average bull market lasting longer than the average bear market. so i have laid out my case. over to you, sir. >> all right. a strong argument. but shoo, i'm going it make the

bull case or the bear case. why we could be lower in a year. stocks are expensive. yes, you pointed out cheap. on a ten-year basis, longer term like robert shiller has, price earnings are not that much of a bargain. earning expectations speaking of, those are on the way down will many people say earnings have maxed out. also, of course, the fake fed led market. once the opium goes away from the fed, this market could drop. volume is low, suggests fewer buyers. of course you've got european problems, maybe china. always the opportunity for just black swan. comes out of nowhere. >> speak with doug just a moment ago. he said most likely would be a black swan that could bring us down. >> so what argument is stronger. mandy's bull case or my bear case? joining us mike ryan, chief investment strategist at ubs, president of kumar global strategies. mike, whose argument are you

buying, higher or lower? >> sorry, i'm going with mandy. >> thank you. >> personal value isn't stretched. we're certainly in a cyclical, gaining traction. also qualitative differences we saw the last time earnings were this high or we had the market this high rather. what we've seen instead of being driven purely by financials it's being driven more broadly, support a policy backdrop. all the reasons mandy cited and more suggest this market will grind higher. >> team mandy. what about you, team mandy or team brian over here. >> unfortunately ladies first i have to agree but today i have to go with brian on this. i think in addition to the negative case that he put forth, the reason why people say the market is very cheap is because partly the argument is built on itself. they say the forward-looking pe is low. when they do, that they are assuming earnings are going to rise very rapidly. that is not something you can

assume away. the economy is going to slow and likely have slow earnings growth in the future, a slow economy. that's a major point. as far as europe is concerned, i don't think the swan is back, it's beige at best. in other words, it is happening. it is not an improbable event. i think i put out a piece and compared with what happened in november 2007 when i looked for a recession which seemed outlandish. october 9th, we had just hit then the highest peak and turned out the stock market was rising even as the recession had begun. so you don't get a signal at all from what you say. >> i will actually go with mandy's own argument to be honest with you, because of number three and my reasons, which is the fake fed led market. the fed indicated they have not taken their foot off the gas pedal any time soon. they are still incredibly easy. history is littered with people who tried to fight the fed and

lost. >> i agree with you. i think the fed is an entity you don't want to fight. that's why compared with 2007, 2008 when the rally lasted for about nine months longer after the economy went into a recession, we now have a three-year rally, four-year rally, despite the fact you have no economic pick up. even with the federal, my feeling is the economy, if it doesn't pick up, the stock market has to correct. the disconnect has to come to an end after three or four years. >> i'm going back to what mike pisani was talking about. you've joined the bull camp here. how long is that going to be? another few months, a yearo ar bob pisani talking about a sustained multi-year bull market from this point. >> i won't go as far to say long-term market but i think certainly has further to run. i'll disagree with one of the things just mentioned about the economy. i actually think the economy is getting traction. we're seeing signs private

sector is reengaging, seeing signs momentum is picking up. i'll also go back to something brian talked about, the fed. this is a different policy than the fed say during the crisis. during the crisis what central banks around the world was focusing on were bad outcomes. what they are focusing on is better outcomes. that's a different point of view. we'll see policy support right through this cycle. >> we certainly hope so. bernanke made two references being this for us just last week. herb greenberg i'd like to you weigh in on whether you go for the bull case or the bear case as we laid out. >> obviously given the way the world goes go with the skeptical case. the concern i have especially when i hear mike's side to the argument is the question of if you're an individual sitting at home trying to figure out what to do, you think this could have aling way to go, this is a trader's mark. can you buy and hold now? is this a green light to buy and

hold or do you still have to trade around in this market? >> i think this is a trade around market. i would say a couple of things in answer to what mike said, and mandy. first of all, you had the gdp growth in the fourth quarter. people expected it to be revised, anemic one. that isn't a strong economy to me. we had distortions because of taxes, personal income boosted at the end of 2012. changes i think are going to get corrected. the last point is if the economy were that strong, why would mr. bernanke in addition to his two speeches before congress last week go to san francisco at 6:00 p.m. local time, when all markets are closed, talk about continued stimulus and vice chairman substantiated that yesterday. all this suggests a very fed in case of being complacent. >> one of the things you mentioned at the out set, don't look backwards, not about

rearview mirror about looking forward. we saw ism manufacturing and nonmanufacturing, what you're seeing especially new water index momentum is building. look at what's happening in the housing market. not only activity picking up, prices stabilizing. this has a virtuous cycle feeding back to the consumer loop. be careful not to look at the fourth quarter and extrapolate that. that's the aberration more than likely going forward. >> street poll on "street signs"@cnbc.com for viewers to write in. we asked a simple question, will the dow stocks higher or lower in a year. vote higher or lower. you sound like mike you would say higher. >> i would say higher. >> i would say lower. clearly lower one year from today. >> how much lower? >> a buyer and seller every market. >> a lot lower? >> i would begin with 15% lower than it is today then the market comes up. i would say maybe 5% lower eventually, 12 months later. >> better opportunity to buy.

>> lower at least -- >> you, my friend, are a grizzly. you're not just a bear, a kodiak. >> i'm also one looking for the ten-year treasury going consistent in what i say. >> we'll get to you. thank you. by wait, remember, vote at "street signs".cnbc.com right now. >> also don't forget to tune in tonight for more on the market's all time high right here on cnbc. >> this special rally edition of "street signs" is just getting started on deck. did you miss the market rally? don't worry? our pickers coming up, have names they believe still have liar to go. >> we also have the analyst who just slapped a big fat $1,000 price target on google. is that the kiss of death? ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss.

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let's just take a look at the ten have done on a historical focus, six out of ten sectors up more than 100% since the 2009 low, that was, of course, in march. consumer discretionary stocks. those are up the most with a gain of 226%. since that last record high, this is the graphic i've got behind me on the big wall, only four s&p sectors are in positive territory. you have, for example, consumer staples. you have consumer discretionary health care and technology. those are the only four, brian,

that are up since that last record high, which is october 2007. i think that kind of just puts a little bit of a sobering perspective on it all, don't you think? >> yeah, helping make the bear case. the market run has been great, mandy, but hasn't been super broad-based. i appreciate that. point number six. all right. a dozen dow stocks are actually down since the peak in october 2007. so will any of these dogs be winners going forward? which dow component should you like and avoid moving ahead. let's ask these men who are joining us by phone. what say you, the muts of the dow. >> there's value. people need to be selective. we're in a camp people should be more choosy, conservative, especially when you see the euphoria of all-time highs. i point out a stock like netflix

leading s&p year-to-date over 100% with 649 trailing pe. there needs to be some pause for concern. the areas i like are more conservative staple stocks health care like j & j, mcdonald's, procter & gamble. strong dividends. focus on a growing demand for selective safety companies with good income and downside protection opportunities. >> what would you be avoiding on the dow right now, matt? >> i am first off a little conservative on hewlett-packard. it's had a great run, up 40% year-to-date. i know all their revenue lines were down. i think the stock has moved too far too fast. i would take some profits in here. also i would look at bank of america and all money center banks as an opportunity to take profits. look at goldman sachs and morgan stanley up nearly 20%. i think a stock like bank of america, up 103% in 2012 is due for profit taking especially when you see they are going to

have positive bank stress test results here. i think people need to be a little more conservative. i would be in a camp more selective versus euphoric. >> mandy will ask you what you like. i'm going to play bear with her greenberg. matt, i know you agree this is one to avoid. is part of that it may be tough to envision a scenario where hpq is actually in a dow in a year? >> i'll tell you something. one of the colleagues i work with here was in one of the electronics store and saw a chrome book for sale for $250, which is the google laptop. you've got all these tablets out there. i think hp's business has changed and the technology has passed it by. it's managing a business that's depreciating, as far as i'm concerned. they reported earnings back in late february. the stock gapped up because they

weren't as bad as people thought they were going to be. short interest up to 110 million shares, that's back down to 75 million. stocks up 40% on the year. i think you look down the list of dow stocks, this is the one that's probably the greatest short candidate at this point. >> got it. both avoiding hewlett-packard. tell us what you do like, give us three names of the dow. >> i like companies that pay dividends, big dividends. i think companies will continue to chase yields all year long. this rally prompted by high interest rates, no yield available in the fixed income market. i like verizon. i like telephone. both have 4.5, 5% yields. then in the energy space the name i like 3.5%, chevron, kind of doing it different than other energy companies in terms of how they are bringing in new reserves. big lng project in australia

will be exciting. those are the big names i like the best. >> we're asking market guests and viewers a simple question, one year from today will the dow jones industrial be higher or lower. matt, what say you? >> lower. i think people are euphoric. people don't understand we're going through a political process. last time political leaders went through this the market went down. take liquidity out not digested yet. obama care, fiscal cliff, all a hit to gdp. i think it will be lower. >> real quick, our previous guest said 15% lower what say you on that? >> i'm not a kodiak bear, i'm more 3 to 5. dividend paying stock, bullish. average stock has 17 pe trailing. average nondividend paying stock 35. dividends ar cheap stock in the market. >> i don't know which is more

bearish, grizzly or kodiak. steve, how about you, higher or lower for the market? >> i'm going to say higher because i don't think bernanke is going to have the ability -- i don't think the economy will set up for him to raise rates. i think drage. interest rates will continue to propel stocks higher. at some point that's going to change. i don't think the change is within a year from today. >> five seconds how much higher, steve? >> oh, you know, i'm throwing a dart. i'm going to guess another 10, 15%. i think we could get between now and the end of the year. just as easily 5%. i don't see the market. we'll have dips and corrects. i don't see the market ultimately being significantly lower in this interest rate environment than any time in the future. >> exactly like the street poll so far split down the middle. gentlemen, thank you very much. coming up next what the smart money is buying now plus digging

in on insider action. surprising things they are buying. >> and remember, folks, not to -- toot the old horn, we're going to toot our own horn. we started yacking about hopium, whatever it was in june 2011, based on the idea things were quietly improving but improving nonetheless. with all the fed-induced stimulus. we started yapping about hopium two years ago and the dow is up 2,000 points. clearly, mandy, two lessons here. one, always watch "street signs." two, history, as we said, littered with those who tried to fight the fed. because remember, america, their printing press is a lot bigger than yours. we're back after this. tdd#: 1-800-345-2550 i've been doing a few things for a while that i really love-- tdd#: 1-800-345-2550 playing this and trading. tdd#: 1-800-345-2550 and the better i am at them, the more i enjoy them. tdd#: 1-800-345-2550 so i'm always looking to take 'em up a notch or two.

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hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. high. indicate kelly here with how the so-called smart money is playing. we're not interested in the dumb money. >> maybe we shouldn't call all hedge managers smart. >> could be dumb as well. >> correct. that's our shorthand, just defining terms for viewers. there's a lot of hedge momentum

behinded rally. february returns from sac capital and third point are proof of it. the hedge fund community isn't entirely convinced today has staying power. in fact, from what i'm hearing, divided into essentially two camps, straightup longs and nervous lamp. first embraces bernanke put, fed's ongoing efforts of quantitative easing will protect the stock market which has been true since early 2009. the second camp believes we have room to run up. a major macroevent could upset the apple cart entirely. a key period over the next two months. over several years we've seen a big hiccup in march or april that broke the losing streak at least temporarily. this year could be particularly vulnerable to that. the market is shrugging off minor head winds like sequestration but bigger ones. too big a rally could leave market way overexposed to precipitous summer and that has some hedge fund managers worried. one key factor, short interest

levels on nyse. big uptake in positions that hurt long shorts and macrofunds as market finished up more than expected. whether smart money keeps piling on shorts will tell usa lot about their macroview and how long they think the rally will last. another point, does the s&p reach new highs and retail investors start to pile in, not just institutions. >> in terms of hitting the mark, getting it right, any particular to watch? >> in terms of the bernanke put, david tepor has been a big embracer. leon cooper of omega advisers basically called this rally 18 months to two years ago and has done very well on it. and there are others. >> greg zuckerberg wrote the greatest book of all time. >> john paulison. >> however, we could make a case pretty soon here, right, that david tepor buying all the banks, especially bank of america at the bottom a couple years ago, could actually be the

greatest if not the most profitable trade of all time. >> that's a good question. i also was going to say i can't believe you are bringing up paulson. earlier i was talking about his gold fund and how many hits he's taken besides being absolutely right about gold, up 17%. the way he played it is through mining equities that hurt. subprime trade absolutely a great one. david tepor pretty much has called it. appe they are pretty happy. >> i like to talk to insider buying, one of the best, george muzia. he says when he looks at the data insiders are telling him risk is on the negative side of neutral. what they are buying, number one on their list, energy. among those energy or natural resources companies with the top patterns include murphy oil, pbr

partners, synergy resources and weatherford international, bottom of the list, consumer staples and telecom least favorable. highly selective, one thing they are pointing out these people are selective in what they are purchasing. again, what we keep hearing, this theme, stock pickers. >> i'm hearing the same thing. energy is a particularly complex phase. there's something i'm hearing a lot about, commodity fatigue. you see pension funds after two years of laggard returns, big turndowns in oil among other things. but that doesn't mean people aren't going to take advantage of the drilling in u.s. >> we are arguing later on in the show whether or not gold is gone. gold is over. i say it is. >> the contrarian argument would be you're in a three- to five-year where money printing will lead to inflation and gold has purchasing power. i'm willing to take you on, too. >> i like making bets and

losing. up next jcpenney, could the stock be a screaming buy? we'll debate that. >> google getting a million dollar price tag. it is, therefore, the end of the run? [ male announcer ] this is joe woods' first day of work. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. sales event has begun. ♪

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google ends the year, closing at the $1,000 mark. could one kb be the the death of google. raised to 1,000 today. let's bring in brian from jeffries who wrote this note. wrote, really, 1,000 already at a record high, brian. >> well, i think the company has a lot of opportunity ahead of it, $1,000 only 20% upsiders from the level. we don't look at it as much in terms of absolute dollar price. obviously we look at it on a multiple basis. this stock is very cheap, only 11.6 times our earnings on 2014 numbers, which is actually cheaper than it was at the end of december. so we look at this as still one of the best values in internet land of all the names we cover. we cover about 29 names or so in the space. >> so you don't buy into the whole idea once a lot of these tech companies become too big no

one wants to buy them. they look elsewhere for the hyper growth. >> no, i think if you broke it apart into different components of growth, that's where it gets really exciting for google. number one we look at product listing ads. that's a really big opportunity. commerce in general is a great opportunity for google. they started to build out international presence that just turned on as of february 13th, the ability to charge for pla's which they haven't done before. as we saw in the fourth quarter with the u.s., huge upside but it's not just that. look at youtube, right? youtube is driving a tremendous amount of growth with trueview ad. a 4.5 million business. just in perspective, compare to netflix, $4.3 billion, substantially lower growth to what google could do on youtube. >> real quick, does google's gain have to be apple's pain?

what we're hearing sellers are trading apple to buy google. >> i think that's fair to some extent. but i would say if you're wound back a couple years, i think a lot of people were selling google to buy apple so i think it's a reversal trait to some extent. i still think there's a lot of growth opportunity here. i think investors are buying growth and shifting out of a name they perceive as perhaps not being a name as google is. i would say amazon and companies like ebay are going to benefit from that reverse trade as well. linked in you could throw in that group, too, they have benefited from growth. growth investors like growth names. these are the companies if you look at the results of the past quarter that are reducing. >> brian pits, thank you so much for joins us. if google hits 1,000 we will have you back on. >> from google to the exact opposite. jcpenney shares trading at their lowest level since march 2009. unless the company is going away, could the stock actually

be a good buy? joining us senior consumer analyst liz dunn. any way to make jcpenney a buy case? >> you know, i think the news today is obviously decidedly negative. when a board member sells stock, it's just not a good sign. they theoretically have more information than we do. i think the company has a tough go for the next several months. they haven't turned positive comps, will have to tap revolver. they have plenty of liquidity. perhaps six months from now, the story could be interesting. at this point it looks like they have more difficult times ahead. >> i will look at, say, your earnings estimates. i know you brought some down. you still have them as earnings estimates in a few years. they are losing money right now. at least,ly, you do see some turnaround in terms of profitability for the company? >> you have to assume something if you believe there's any value

here at all. our price target is based on five-year earnings outlook of $2.50 putting a multiple on that and discounting it back. i don't think we're being overly aggressive fwu i don't think you need to look at the stock until they start to turn positive comps and i don't think that happens yet. >> stock hits to what level to make you turnbullish again. >> that's tough to say. we took our price target to $15 today. i think, you know, maybe another 20% downside to that we might get more constructive. but it really is about the results of the company. like i said, i don't think they are going to run out of money. they have plenty of liquidity. it's just whether or not investors and board members get frustrated with the strategy and decide to, you know, alter the course. >> liz dunn, thank you very much. appreciate it. >> leave it to her to find a stock that is down. joining us on this dow record

party we're talking about. >> i've been doing a lot of work. northland captain list, initiated with underperform today. it's the depth of his research and this comment, our extensive field checks highlighted a story where aggressive marketing drives the message and true clinical utill seems secondary in nature. now, intuitive told me it has no comment on this report. i will say this research supports what we have found in our ongoing cnbc investigations investigation into intuitive. guys, i will have a lot more on this in coming weeks, continuing to talk to a ton of people on it. >> okay. we look forward to more developments on intuitive. meantime, dig in on the one sector that didn't even exist during the last market high. >> later on, housing. then and now. will the rally help boost the housing market? we'll dig in. first, bill griffith, i have a feeling i know a little bit

about what might come up on closing bell but what else. >> this isn't easy to program. coming up, take you to the close, see whether the dow record will hold. we're going to debate whether this market rally is the catalyst that can jump-start what has been a stagnant economy otherwise. forget the dow, we'll hear from somebody who says there's another index that is ready to lead this market. the ultimate bear harry dent back with us says there's no way this rally can last. find out why he's sticking to his guns on his dow 6,000 call. maria and i look forward to seeing you at the top of the dow stock exchange. see you at the top of the hour at closing bell. meantime "street signs" back after this. our financial advice is geared specifically to current and former military members and their families. life brings obstacles. usaa brings retirement advice. ♪

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get advice from the people who share your values. for our free usaa retirement guide, call 877-242-usaa. unless you've been under a rock today, you would notice the dow in a record high. it surpassed it's record closing high in 2007 and intraday high, 14,275. the question is if it will close at its record high. we are watching. meantime social media just in its infancy in 2007. look how cat videos contributed to today's record. let's get more on this with

julia boorstin. julia, explain. >> back in october 2007, none of the social media companies were public, facebook had 15,000 users and $15 billion valuation compared to its 1 billion plus users and $67 billion market cap today. at the last linkedin just reported its 14 million members could post a profile photo. can you imagin today the sight has over 200 million members. its stock is up nearly 290% since its may 2011 ipo. it's far outperformed facebook, which is down 26% since its ipo last may. the real losers are zynga and groupon. their stocks down 64% and 72% respectively since their late 2011 ipos. now, at the dow's last peak netflix was public primarily in the dvd rental business and just launched a streaming video service. since then the stock has gained 700%. now, notably absent from this

list is myspace. back in 2007 it was considered the leader with 200 million members and 45 billion monthly page views. myspace, of course, fell from grace and failed to make the transition to mobile, which is where all the public social and video companies are focused very much right now. brian. >> julia boorstin, very social yourself. thank you so much. all right. as we continue our march higher for the dow, let's talk about two things that maybe won't participate or will. oil and gold. let's bring in president of boston advisers. all right, mike. i don't know if you heard it, i just bet kate kelly gold in a year will be below 1500 an ounce. i say it will. she says i'm insane, who do you think is right. >> i think you're both insane to take the bet. i don't think anybody has a clue where gold will be. look, it's clear gold has become

in her words sort of a commodity fatigue trade. people are tired of it, it's gone up a whole lot. i think at this point the fundamentals haven't changed a whole lot. right now we're seeing the substitution trade for the hot young asset class called stocks from what we understand they don't go down anymore. >> what happened? for the longest time they were going in lock step, right? both gold and stocks moving in lock step, moving like a risk asset. where was the divergence and why? >> i think what happened was end of qe3 and quantitative easing becoming more prevalent, more visible. people are beginning to say the reason i bought gold is because of all the additional liquidity the federal reserve systems around the globe are putting into the system. and that's beginning -- the sort of rate of change is beginning to slow. >> it is? >> people are speculating it will be over. >> feels like bhaengs are still printing. >> definitely printing, a second derivative issue here.

it's beginning to slow down. people are beginning to speculate. there's a little more argument at the fed at the last fed meeting about how long to keep this going. people are anticipating. make no doubt, no mistake. meantime you've got a stock market. you've seen this et holdings. we've lost about 4 -- i can't remember the number of ounces, they have come out of gold this year, sharp, accelerating and driving the price of gold down. >> i do worry. you want stocks to do well. you want mom and pop, retirees to do well. you know what's going to happen, tomorrow morning market new highs in the cover of general newspapers. not cnbc but general news. people are going to say, did i miss out. people are going to start poking around. what's the risk for them? i do worry people get in at the wrinkle time. how do we prevent that? >> we've had a ten-year bear market in stocks. we could have a great rotation here. i think the makings of it are just beginning where the bond flow reverses money going bo

bond funds. you get significant flows in equities. we're seeing in gold today. the odds are it could happen, drive the market up. back to the question, is gold higher or lower in a year. really a function of whether or not quantitative easing and massive amounts of liquidity remain in the market. if they do, see stocks higher. >> got it. mike, thanks very much for joining us today. >> thanks. >> guess what other group isn't anywhere near its all-time highs. it is the home builders. coming up we're going to find out if those stocks make it back their 2005. [ male announcer ] let's say you pay your guy around 2% to manage your money.

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. well, housing still has some way to go to get back to its peek. diana olick is in las vegas and she has more. diana? >> reporter: well, that's right, mandy. you know, here in las vegas, the houses are finally going up again, but we've come a long way from the last time we saw the dow cross a new high in october of 2007. back then housing was just beginning its free fall. the homeownership rate which reached a high of just over 69% in 2004, stood at 67.8% in '07. today it is still falling, now

down to 65.4%. housing starts had already fallen from a peak of over 2 million to 1.2 million. today starts are coming back, but we're still only at about 890,000 annualized rate. now existing home sales are a better story, falling from a high of just over 7 million in 2005 to 4.43 million in 2007. sales are actually better today with january's numbers coming in at around 4.92 million. now, home prices, they had already begun their slide back in '70. today on the s&p case-shiller index prices are recovering, but they are still down about 27% from the peak in 2006 on the s&p case shiller home price index, but the biggest change is in mortgage rates and mortgage activities. back in october of 2007 the 30-year fixed stood at 6.83%. we're at about half that now and rising just a bit. but it's a tale of opposites because refinance volume today is twice what it was back in '07

and mortgage applications to buy a home, they are about half what they were back then. back to you, brian. >> diana olick, thank you very much. let's bring in a home building and building products analyst at capital markets. when did you go positive say on lennar? >> start of last year we got confirmation that there would be a lange-term recovery in terms of housing starts in the u.s. >> at the end of the year it was like a teen, 19, 18 bucks. >> the start of 2012 was when we got very constructive on the housing market. >> it's doubled since then. >> it has gone from 787,000 starts in 2012. the prior year was 610,000, so that's terrific acceleration. but we're looking for 950,000 starts, climbing back to the long-term average of 1.4 million by 2015 or 2016. >> so a lot of these home building stocks had v had quite a run because of the expectation that things are getting better.

when do you think they will get back to the 2005 peak say? >> thinking 2015 is kind of the normal level where we get back to 1.4 million starts. we think better profitability, better pricing environment, margin expansion stories is going to play through, so we could probably get back to peak levels a bit earlier. >> still a lot of upside for a number of these home building stocks. >> last year was an anomaly. last year you had to be early and right and make an aggressive call because he didn't have confirmation. 2012 was the volume story. 2013 is about maximizing profitability, by optimizing price verse pace. we think this is the year we're going to see very strong pricing fundamentals in the housing market. >> so it's not -- it's not a no-brainer. i mean, you sit here and just buy them until 2015. >> we like that. >> we like that. >> we like the buy on weakness, dollar cost in on market weakness when the broad market sells off. that's when you want to come in. >> lennar, and i'm not picking on lennar, i know you love that

stock, it was a $10 stock at the beginning of 2009. it is a $40 stock, right? so it's gone up four-fold. the highs mandy referenced were above 60 back in 2005, so i can look at it and say it's gone up from 10 to 40. how much more possible could that be? >> i'll get you to 45 or 46 in 2013 and if you want to go further out in 2015 and '16 this is again going to be a $60 stock because you have that earnings growth and these guys are the best management team with the strongest assets in the sector, so they have a path to profitability that they are starting to execute. >> rising rates. >> any concern if that were to occur? >> you know what, this rising rate story, we like it because if we saw firmer rates, it would actually mean there's strength and growth in the economy. the biggest headwind is the fact that consumers aren't making enough right now. unemployment is high. we need to get the economy jacked up again to 2.5% to 3% growth. that's going to be a tremendous tailwind. >> any stocks that have looked

to take profits? >> toll is a great builder, dominates the luxury end of the market but we think the stock is priced to perfection. tons of respect for management, current levels and where it's gone, things have to work out perfectly for that stock. >> pleasure. >> thanks. >> we are going to jump back into the old "street signs" hot tub time machine. we're going to go forward in it because we'll ask where stocks will be on march 5th, 2014. what are the options again? >> higher or lower. very easy. your guesses coming up next. >> that's a lot of options. mati. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.

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